GROWTH CONTINUES—THE SECOND QUARTER 2016 DENTAL DOW

Comparing the first half this year to the first half of 2015 for the mature area practices sampled, we find that practice production is up by 5.8% and collections are up by 5.2%, which is slightly off the first quarter’s pace of about 6% for production and collections.

Total patient flow is up 3%. New patients are up just 1%.

Open time in the hygiene schedules remained steady, but Doctor open time increased 15% giving up some of the gains that we experienced last year with reduced Doctor time.

Total production per exam is up 2.5% and crown and bridge is up 3.3%. Doctor Productivity remains the same at about $660 per hour.

So far, this makes about two years in a row of gains similar to those “pre-recession”. So, most dental practices aren’t confronted with an economic headwind against practice growth but no smart practitioner is complacent about practice vitality.

No one gets a gimme!

DO YOU THINK IT’S TRUE THAT?

  • Keeping the schedules full affects collections?
  • What your clinical team says to patients regarding insurance affects collections?
  • Communication between front and back affects collections? Hint: Almost every practice loses thousands of dollars per week because of that gap.
  • Treatment staff can reduce changes in the schedule and does that affect collections?

What Would Uncle Dick Do?

Uncle DickMy Uncle Dick is the reason I’m in Dental Practice Management. After college, I was looking into Medical Practice Management when my Uncle Dick (who practiced Dentistry in Rochester, MN for over 30 years) said, “Hey, check out Dental.” From that tip, I ended up working for the Professional Economics Bureau in 1980 and eventually became their Vice President. Then I started Advanced Practice Management in 1990.

My Uncle Dick really loved Dentistry. He was once President of the MDA in 1979 and very active in Continuing Ed. He was one of the early “Pankey Guys.” He also did missionary work in Madagascar and has been an ambassador for Dentistry in other places like China and Cuba.

When I’m running a meeting and coaching dental offices, I often imagine my Uncle Dick is sitting in. Would he be proud of what I am doing?

Dentistry has gotten a lot more competitive and certainly more business-like than in my Uncle’s day. I’m sure Uncle Dick would wince at the huge signs you see in dental offices now (in his day, signs couldn’t be lit and they couldn’t be more than 3 inches high) but he’d sure understand battling with insurance. He dropped participation with Delta Dental around the time he was MDA President.

He’s a big reason why “Clinical Calibration” is at the core of our ethical approach to patient education and case acceptance. It’s about “Criteria” not “Quotas.” We know that different Doctors have different clinical protocols, but, if their team is effectively presenting dentistry that’s true to their own inner laws, then we can all sleep well at night.

Uncle Dick is still alive and well at the age of 91. He lives with his wife, my Aunt Pat, in Sun City, Arizona, but he has been “attending” meetings with me for the past 35 years.

Your Statistician

Your StatisticianEver wonder about the effect of evening hours on a practice in attracting new patients? How about Friday afternoons? How important are Google Reviews to bringing in new patients really? Do practices with higher PPO participation really get more new patients than those with more mid-range or low participation? What are the properties of practices that attract more than average new patients and those that attract fewer?

We monitor over $30 Million dollars’ worth of dental activity per month in over 220 offices with over 300 Dentists represented. That’s a lot of data to sift through but I’ve found the guy who can do it!

I brought on Anantha Santhanam. He did analysis work for the Mayo Clinic and is attending the Carlson School of Management. Now he is working for you because everyone on my team is on your team.

In our consulting meetings this year we will be bringing you up to date on this research.

This is another example of how you, as an Independent Practitioner, get top notch management support from us.

STATISTICAL SNAPSHOT:

Production per Exam (from our APM Database): This is a measurement of the range and depth of dental services accepted and delivered.

Your Statistician 2

Your Fixer—Turnover Insurance

Your FixerDoctors, when you hire a hygienist or assistant, they’re right under your nose. For the most part you can see their work and know if they’re “on the job.”

Not so much so for the front desk team. It’s hard for Doctors to have the time, much less the knowledge, to know that all the bases are covered at the front desk. Are the insurance forms and bills getting out on a timely basis? Is the Recall System organized? Is there treatment follow up on patients that didn’t previously schedule? How is the front desk person handling the phones with new patients (or anyone)? Are they doing all that can be done to keep your patients happy and your schedule full?

Let’s face it, most of you don’t have the time or inclination to really stick your nose into the practice management software and see what’s going on. Even well-meaning, experienced front desk people can be dropping the ball without knowing they’re dropping the ball. You don’t want your office systems to break down due to turnover.

That’s where Heidi Benson comes in. Heidi is our new addition but she is certainly not new to dentistry. For over 20 years, she’s been a Dentrix trainer and she’s familiar with most all dental software including: Eaglesoft and Open Dental.

So, if you have turnover, call us and Heidi will come to your office for a “Systems Check Through.” If your front desk person is doing all that should be done, you’ll have the peace of mind of knowing it. If there are areas that are slipping, Heidi will nicely offer any relevant advice. Heidi is not a threat to your new front desk people…she can be their strongest ally. We want your front desk people to be happy and you to be happy with them. You’ll have busier schedules and a better bottom line (plus peace of mind knowing it’s all under control).

So, if you’ve had turnover in the last few months and/or want your administrative staff to get a one-on-one tune up, call me. We will get it done!

THE MDA CONVENTION IS COMING – DON’T KEEP US A SECRET:

Your good words are still our single best source of new clients. Please don’t keep us a secret. When you see colleagues who tell you their practice is “stalled”, tell them to call us. We’ll make sure they’ll thank you for the suggestion.

Aspen’s Abounding!

Aspens AboundingThere are now 12 Aspen Dental offices in our state, one in North Dakota, a couple in Wisconsin and one in Iowa (there are over 500 nationally). They’re actively seeking Dentists in almost all of their Minnesota locations.

An Aspen Dental opened up in Bemidji in 2015. My clients there say that it’s been closed for some months now presumably because their previous Doctor(s) departed. They are searching for another one now. For a little schadenfreude, Google “Aspen Dental Reviews.” As far as I know, they are the most maligned dental entity on the Web. Even so, they must have lots of money behind them because they keep adding clinics.

I just heard of a recent case in which a young Minnesota Doctor bought a practice and then found, probably to his chagrin, that a brand new Aspen Dental was being built across the street. He’s not a client of mine but if he was, I’d tell him, “Fear not!”

I like to use Aspen Dental as an example of what the independent private practice doesn’t want to be. Yes, they’re shiny on the outside. They cover lots of hours and carry lots of PPO’s. They can’t be ignored. They are a competitive force. However, the lawsuit cited by the ADA last year in New York, where they were sued for $450,000, says what the core of their problems is. The company was run by the “Suits” not the Doctors.

Now I’m a “Suit” myself but I like the idea that the Doctors get the final decision on what clinical treatment happens with their patients. Doctors do too and that’s one of the reasons why the larger group practice models (“Corporate Dentistry” or “DSOs”) tend to have greater turnover of both Doctors and staff than the private practitioner.

An obvious point here is if you have good staff you want to take good care of them! After the great recession, many practices did not award wage increases for a year or two – some longer. That’s changed now as the market heats up for assistants, front desk people and hygienists. Don’t take your staff for granted!

Of course, you don’t take your patients for granted either. People repeat experiences that either feel good or make them feel good. Since most dental visits don’t actually feel good, you want to make sure the patient feels good about themselves when they leave your office. That means really listening to them. Sincere compliments. Sure, you have to tell them if they need to floss more or get this or that done, but you can have them leaving feeling good about the stuff they are doing right and, most of all, that they were smart to get on in and get their checkup (or whatever). Of course, I don’t mean this in a patronizing way. For example, patients that commit to perio treatment are going through some inconvenience and expense and should be really congratulated for their efforts.

“Joe, I know getting here for these treatments can be a hassle, but you’re doing the smart thing. We see many people that wish they had done what you’re doing years ago—saving a lot of trouble. So, good for you for taking good care of your smile.”

Show Off Your Quality a Little: Ask your staff to constantly deliver the message that, “Dr. Goodguy does dentistry that looks good, feels good and lasts long.” Or phrases like, “Dr. Goodguy only uses the finest materials and your fillings (crowns or whatever) will last a long time if you take good care of them…” “Dr. Goodguy really stands behind his work. If there is anything more we can do for you, be sure to let me know. Here’s my card, just call…”

Of course, you already know that this should be getting done, but is it? If having a bright shiny Aspen Dental across the way stimulates you and your staff to take these extra steps to reinforce the value of what you do, the kind of practice you are, well then,
Aspen Dental might actually do some good!

Collections Seminar—November 4

Collections Seminar

Presented by: Shelly Ryan

Friday, November 4, 8:30 am to 12:30 pm Embassy Suites Bloomington, MN

This perennial favorite is a must for you and your team. Dealing with patients, money and insurance is something you have to do every day so why not do it well? And, it takes the whole team! Take the confusion out of dental fees and insurance so your patients follow through on treatment and your schedule stays full.

This seminar is almost always a sellout. As clients, you get first dibs and a discount! $198 first person and $178 each additional. Register by May 15th and receive $40 off per attendee. So CALL TODAY (952-921-3360) to reserve your space before we do our general mailing.

The Dental Dow—First Quarter 2016

BillGROWTH CONTINUES—THE FIRST QUARTER 2016 DENTAL DOW: Continuing the trend of growth from last year, practice Production is up 6.1% and Collections are up 6% compared to the first quarter of 2015 for the mature area practices sampled. Patient Flow was up 3.9%. New Patients were up about 2.7% (they were up about 7% in 2015).

The highest Doctor Production per Hour in our Dental Dow sample is $1,484. The highest Hygiene Production per Hour is $213. The Average Doctor Production per Hour is $652. The Average Hygiene Production per Hour is $151. Again, keep in mind that this is a group of mature practices and a mix of Metro and Outstate locations as well.

EVERYONE ON YOUR TEAM HAS TO DEAL WITH PATIENTS, MONEY AND INSURANCE. MAKE SURE THEY KNOW HOW!

How goes it with Physicians?

sulivanFor 33 years, Bill Sullivan has been the Executive Vice President of Dr. John Najarian’s Medical Research Foundation. The Institute for Basic and Applied Research in Surgery (IBARS) provides additional funding support to the Department of Surgery at the University of Minnesota with an emphasis on Solid Organ Transplantation, Surgical Oncology and Cardio-Vascular Surgery.

As with Dental School, most physicians graduating from Medical School have a total debt load of approximately $300,000.

Three “cataclysmic financial events” occur when many students graduate from Medical School. About one third marry another medical student, effectively doubling their tuition debt load. Next, Medical Students tend to buy homes they cannot realistically afford. And third, it is not at all uncommon for Medical Students to have a baby, effectively taking one of the wage earners out of the full-time practice of medicine.

Painfully, healthcare economists have calculated if a medical school couple assumes a “non-dischargeable” debt load of approximately $1 million dollars, over the course of a 42 year professional career, there is “great likelihood” they will not be able to retire their tuition obligation.

The average income of a Mpls./St. Paul Family Practitioner is $177,600, but new grads often earn less than $100,000/year in their first 3 years.*

This has resulted in the non-too-subtle self-segregation that is taking place between the ranks of the primary care physicians and the specialists. Recognizing the extraordinary costs involved, many students are gravitating to higher paying sub-specialty disciplines which, in turn, render the relative salary structure of the general practitioner to disproportionately fall behind.

THE 2012 AFFORDABLE CARE ACT (ACA)

Economists, political strategists, and business leaders have argued for years to expand the base of the insurance pyramid. Enrolling young, healthy candidates would help offset the exploding costs of health care costs today.

At the national level, this desired-for goal has not played out. In fact, young people remain reluctant to sign up for healthcare insurance. Even with a bitter pill of an annual Income Tax penalty assessed to those without healthcare insurance, many argue it is simply cheaper to “pay the penalty.” What the nation has witnessed over the past two years is a disproportionate enrollment among young and middle-aged participants whose needs for healthcare are defined by a host of chronic medical problems.

While some states have done an aggressive job of moving many off of the Medicaid roles by offering healthcare insurance subsidies, the sad fact remains that too often young people today suffer a disproportionate number of problems related to obesity, diabetes, early onset heart disease; all problems typically associated with an older population.

A TWO (OR THREE) TIERED SYSTEM

  • The “financially advantaged” will always be able to receive care, most likely from a concierge physicians’ service. Painfully, 40% of physicians 55 years of age and older are opting out of Medicare participation and this number is growing. This is very bad news for aging Baby Boomers who are bound to need increased health care.
  • The “financially disadvantaged” will receive care via Federal programs implemented at the State and Local levels.
  • Sadly, the majority of Americans will fall into a system of quasi-rationing. Of course they will be treated, but there will be long lines of other patients ahead of them, “Justice delayed is justice denied!” and “Healthcare delayed is healthcare denied!”

* The mean income for a General Dentist in Mpls./St. Paul is $189,000. The range for means throughout Minnesota is $183,490 to $224,830. Source: U.S. Bureau of Labor Statistics, 2014 data.

Time to Recalibrate Your Incentives

BillMost incentives need to be adjusted each year taking into account factors like:

  • Additional staff
  • Raises given to staff
    (Both of the above items change the Overhead landscape and therefore the incentive targets)
  • New practice goals & projects
  • Upcoming performance reviews

So call us and we will help you retune your bonus targets.

About a third of area practices have their staff on an incentive. If the conditions are right, we highly recommend incentives. It gives the staff a stake in the practice success. However, sometimes incentives get to the point where they are no longer stimulating performance. They go from being a “nice bonus”, to being expected, to being taken for granted and a “right.”

Sometimes it makes sense to discontinue an incentive that’s no longer helping to foster a harmonious and productive team and that extra edge of performance that we are always looking for. This is best done in conjunction with performance reviews because you can “buy-out” from an incentive by awarding increases and then change the game according to the practice’s situation – or just let it lie fallow for a while.

Productive Performance Reviews: As many of you have heard me say, I feel that a productive performance review should not be a bureaucratic “grading” process. Everybody hates that.

Instead, I feel that a performance review should be a cross between a “Wedding Anniversary” and “Let’s Make a Deal.” That is, the employee should be thanked and honored for their contributions for the past year. Recognition matters to high performing employees. So when you give a raise, it is helpful to give it with praise – in a bouquet. Then you’ll get more of what you want (happy employees). The “Let’s Make a Deal” part is where you outline 3 to 5 concrete things for the employee that you want their help with,

“So Debbie, I am very happy with how you’ve gone beyond the call to increase your skills this year, are flexible in working hours, always willing to lend a hand and always cheerful. That’s why I am giving you a 4% raise this year…

Now, for the coming year, here is where I need your help…”

Then outline to your employee what you’d like them to do.
Examples:

  • Get the Continuing Ed to add to their skills (for example, the front desk to learn more about QuickBooks or the Practice Management software)
  • Flexibility in working evening hours
  • More use of the intra-oral camera
  • Better front desk collections
  • Be more punctual

Be very specific and concrete. Note the requests and then the next year, if they’ve made progress in those areas, thank them. In fact, don’t wait until next year! Tell them right away if you see a change in behavior (or don’t!).

As practice owners, you have an automatic “incentive” program. You know your career, your livelihood is at stake. Employees are a step or two removed from the harsh realities and from the rewards. You don’t need anyone to motivate you to grow, to get better, etc. Create an environment so good employees can flourish. Valuable team members are always adding to their skills, always helpful, pleasant and hardworking. If you don’t recognize those qualities in an employee, they will go somewhere where they can be recognized!

Oh, and one more thing, an important part of the performance review process is to ask the employee, “What can I do to help support you in doing your job and in being happy at work?” and then really listen to what they have to say. You don’t have to grant everything that’s asked for but if you take what they say under consideration, they’ll know that. At the very least, you’re less likely to be surprised by having someone unexpectedly quit.

Smart Wage Decisions: I believe it’s best to take a look at staff wages as a percentage of collections at least once per year for the sake of determining how much will be available for wages and raises. If your total gross wages were running at about 25% of collections, for example, last year and they are 23.5% now (because your collections grew) then you are in a position to give raises. If staff salaries have crept up to 27% or 28%, then it’s time to hold off until your practice revenue catches up.

Using this very simple method, you can keep the biggest part of your overhead (staff wages) under control.

Dental Dow 2015 Wrap Up

Comparing 2015 to 2014 statistics for the mature area practices sampled, we found that practice production was up 6% and collections were up 4.8%.

Total patient flow was up 3% with New Patients being up 7.3%. The average production per exam was up 3.2%.

Metro Area Fees were up 1.3%. Outstate Area Fees were up 1.7%.

Producon Increase Percentages

2009 2010 2011 2012 2013 2014 2015
0.5% 1.4% 2.5% 3.3% 3.3% 4.2% 6.0%

Collecon Increase Percentages

2009 2010 2011 2012 2013 2014 2015
0.4% 0.4% 1.6% 3.5% 2.2% 3.1% 4.8%

As you can see, this is the most growth in 7 years.

Our Dow, a sampling of both Rural and Urban practices, shows an average collection percentage of 84% – down a percentage point from last year. The Collection percentage has slipped by around 1 point per year for the past five years. Doctors are raising fees but, of course, PPO Participation is affecting Collections.